dagen: worked in bars and restaurants, golf course, you know, tips matter to everybody. thanks. default's bankruptcy in the spotlight. the fallout of today's ruling for the rest of the nation. janet yellen says there is no stop bubble but what about bonds? the president tries to get the disenchanted young on board with his health care law. will that work? the miscue over first down in sunday's redskins giants contest could turn the average nfl game into a laser show. we are looking forward to that in the next hour of markets now. connell: they to it. a lot of news. dagen: motor city, auto sales. connell: first to nicole petallides on the floor of the stock exchange looking at today's markets. nicole: good morning. good morning, everybody.

right now all we mayybe clocking in some losses for the third day in a row for the dow and the s&p and we haven't seen that since september. dow jones industrials down 66 points at 15,932 and nasdaq down sitting at 1797, friday is jobs friday, watching for that. also a close eye on dow chemical which jumped to little bit yesterday on this news, pulling back now, trying to spin off part of their business so we have seen this moving back and forth, gains going back today. connell: breaking news in a detroit courtroom where a federal judge is ruling whether or not the city can continue with its bankruptcy filing. dagen: a win for the city? jeff flock live from detroit with the latest. jeff: it is accused ruling. for the first time ever a federal judge has ruled in detroit std may cut, diminish

the pensions of municipal workers in bankruptcy, first time there has ever been a ruling like this and it may have huge implications across the country. we are seeing out here on the street protests against this. i heard the crowd back here saying judge rose can go to hell. judge stephen rhodes went farther than people thought he would go. many speculated he would approve a bankruptcy filing but the city hasn't met its obligation. it is insolvent, $18 million in debt and negotiated in good faith with its creditors prior to the filing but went farther than that. he could have set aside the pension issue but instead he said in fact the city has the right to cut pensions as part of its reorganization plan. i should that he did not say he would approve specific cuts so we don't know what those cuts might be. i want to get a little flavor of this if i can.

these folks were in front of the courthouse before this even started, but i have got to believe this ruling is a huge blow to city pensioners. trying to listen to what people saying. let's listen. >> a legal classification moving forward in this bankruptcy. illegally not presenting the city of detroit or legal requirements for this bankruptcy, this is outrageous. >> you can hear there was no real negotiation. the judge said the opposite, in fact the city had negotiated in good faith and here is the key piece of his ruling according to my read preliminarily, pension rights are in fact contract right so pensioners must get in line with all the other creditors and there are

literally thousands in the city of the troy so acute ruling today. we will see fallout all day but big news in detroit and is not about the auto industry is so there is news there too. connell: great reporting and we will be back on that story and the implications. dagen: the judge will allow those pensions to be cut with reaction, a senior fellow at the manhattan institute who specializes state and local governments joining us now. initial reaction to this? >> first of all detroit is a city that if any city in america is insolvent it is detroit. has been borrowing money and using deficit financing for years. this is not a bankruptcy like jefferson county, alabama which is a single transaction. this is a city that is structurally solvent meaning it spends more than has coming in and accumulated debt that it can't pay back.

connell: this portion of it jeff was referencing, refused to go farther than people thought with regard to pensioners. they get no more favorable standing than other creditors do. jeff says that could have implications for other places. >> it could have implications but those places have to be in bankruptcy. at this point you have two dozen states where state court rulings or constitutions protect pensions, not only what you already earned but anything you might turn going forward which is far greater protection than anyone has in the private sector.% so you still have to be in bankruptcy for this to apply and right now we don't have a lot of cities tumbling into bankruptcy. dagen: will it encourage them and push municipalities toward this? >> it is a very interesting subject because chicago is a good example. chicago is a city that has such enormous pension debt that

people say it is impossible for chicago to pay off their pension debt and the former mayor richard daley said we should let the pension system go bankrupt so you do wonder whether places with tremendous pension debt will use that as a bargaining lever saying essentially if you don't negotiate with us we will have to put ourselves into bankruptcy because we can't get out from under the debt in any other way. connell: almost instinctual when this comes out the broader implications of its but specifically for detroit, what do you think this means? >> i do think with its tremendous debt, $18 billion and structurally insolvent budget going forward, if detroit didn't get this i don't see how it makes a new start. you have got to cut the debt and it is not just put on pensioners by lot of investors including

normal union investors who put money into this, a fiscal manager of detroit said to investors i am going to cut you too because the city has been growing -- going broke for a decade and you continue investing. dagen: cities in other parts of the country, at least detroit in the area have the tail wind of the auto industry which has come back because the government bailout for chrysler and general motors, detroit had that and what about the health of other cities? are they getting healthier? >> slightly but not a lot. this has been the weakest recovery since the depression so what you see is tax collections coming back but only gradually and now with the softness of retail sales people forget that states rely on holiday retail sales for their own sales tax collections and that is not a good sign. connell: are not worried about another big city going the way

of detroit. >> not over the long term but other big cities the problems with the pension systems and all these cities even chicago where some of the pension systems are 25% funded but they have a trust fund with money to pay people for now but going forward as investors look what it would take to repay the pension debt, more and more investors are saying i am not sure going forward i should do what detroit investors did a decade ago which is continue investing. dagen: bottom line for d 2 and other municipalities this could be this will bargaining chip to bargain with the unions in other cities. >> the judge has set a precedent. if he said the other precedent it would have removed that as a bargaining chip. connell: something that they had to have. thanks as always. dagen: good to see you. bernard: connell: in terms of markets janet yellen had a headline saying she does not think there is a stock market bubble. the debate we have on the show,

the question of possible bond bubble is just as if not more important and talking about that from baltimore is leo kelly, chief executive officer and managing partner of kelley investors. what about the idea of a bubble in the bond market? a simple question. >> without question there is a bubble in the bond market. we could interest rates below inflation and had been down for quite sometime in 2008-2009 crisis and the extraordinary efforts the fed went through to recover the financial system, that caused the bubble. what is extraordinary is we are still in the crisis intervention monetary policy with significant gdp recovery. connell: treating the economy like a crisis, talking about the

recovery has been slow but not a crisis anymore and we need to get rid of this policy. >> the fed board in $3.5 trillion adding $85 billion a month. it is another trillion. and they did it in an environment where they were returning to normal behavior patterns. connell: the idea of being straightforward, absolutely, what happened? what is the follow-up? >> whether it is tech stocks, they go to an extraordinary level. bond prices go up because yields are coming down. you always get a warning at the end of the bubble, extraordinary

reversal, and look at the bond markets, we just had that. at 1.7% on a ten year treasury, at an all lori: pace. after ben bernanke set i am worried about the pace of the interest rate, and climbing back up, all this money, inflation is inevitable, interest rates go up. and the bond bubble move, a bursting of the bubble, risk takers. and they are the ones that get hurt. connell: you are absolutely right, people have shifted their life savings to the bond market. interesting we started the show showing people in the streets of detroit hurt by the mismanagement of that city and upset about it even if there is

nothing that can be done. you are saying a lot of innocent people could get hurt. something you advise them to do generally, older people shifted lot of money to the bond market because they thought it was safe to avoid the worst what would you tell them to do? >> what you have to look at is not one trillion dollars has gone into bond markets since the 2009 crisis and only a few dollars came out as bond prices started to drop. people are still overallocated to long bonds. we tell people to understand the difference between credit risk and interest-rate risk. credit risk is the united states government treasury. they will pay their bills so we assume. interest rate risks as if interest rates go up the value of your portfolio goes down. you need to look at how long your bonds are. shorter, safer than long and are there other fixed-income alternatives? other places to put money away

from the fixed-income market that are not necessarily have the risk of equity, you need to seek out help from an adviser and walk through the frost and start to take risks off the table. connell: an adviser with specific advice for everybody today, the shorter the better, more to it. good to see you. see you again soon. dagen: the number of banks in this country is that lowest level since at least the great depression. and to blame regulation. connell: adults dressing in costumes. star wars cast is now a big player when it comes to the famous word sotheby's. dagen: you like dressing up as johnny carson. connell: johnny carson? dagen: such a nerdy thing to do. more than dressing up as darth vader. connell: thinking about it. dagen: and getting it right.

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dagen: the shopping numbers over the weekend are out. sony cannot keep microsoft at they. nicole petallides has more. nicole: no one knew what to anticipate for the holiday season, thanksgiving, black friday, the weekend that the numbers are telling over these four days and what we have seen is microsoft is outpacing sony's play station. both stocks are to the downside. sony at 1843 down 1%, microsoft down 1/3% but black friday because of x ox 1 by 2-1. in walmart and target it turns out that microsoft x box 1 and the x box 360, usually

discounted, accounted for 60% of the games consoles that were sold. then there was a place station iv and those prior generation sos. you are seeing a three year chart. you can see microsoft has outpaced sony over the three years over the 1-year year to date, sony is a better performer up 64% to microsoft's 43. connell: an interesting set of numbers that a number of u.s. banks is at a level on record for the third quarter of 2013, federally insured institutions nationwide. total, 6900, first time the number of banks is below 7,000 in the u.s. since the government began to keep track in 1934. the plan is being spread between sluggish economy:interest rates, government regulation, the cost of strict regulation forced many banks with less than the one hundred million dollars in assets to close down completely.

dagen: you may find your lack of faith disturbing but when it comes to instagram, darth vader is racking up followers. the first post ever the instagram account star wars post said the system board after east formed the rebel starship to find the missing death star plans. the account has 87,000 followers, looking at right now, the first -- like twenty-five thousand times, more photos of darth vader in a light saber babble and the star destroyer. connell: not a model. connell: i don't want that. dagen: we have a collection of star wars figurines. connell: did you really? dagen: better than bobby. connell: probably true but people who want them getting to the star wars movies and dress up as the characters. dagen: what is more disturbing? people into the hot and lord of

the rings or star wars? connell: it can all be disturbing. small-business hiring on the rise with the first time in months, the billionaire john paul will be joining us with what needs to happen to keep the momentum going. dagen: speaking of momentum of the white house trying to build some 4 obamacare. how the administration plans to convince younger people to sign up and get happy and take a look at world currencies against the dollar today. so ally bank has a raise your rate cd

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24 minutes past the hour your fox news minute. reports a the engineer of the train that derailed in new york told investigators he zoned out as the train approached the curb a. four people died and 63 injured in the crash. the national transportation safety board says the train was traveling at 80 miles an hour when it reached the curb which posted a speed limit of 40 miles

an hour. north korean leader kim jong moon is believed to have had a hand in the removal of his uncle from powerful position in an nation's government. he was key to his nephew's rise in power. lawmakers in south korea say kim was able to consolidate his power base with the move. scientists have discovered a world war ii era japanese submarine buried in the ocean floor off the coast of hawaii. the sub was considered a technological marvel of its time. the vessel has been missing since 1946. those are your news headlines on the fox business network. connell: thank you very much. dagen: let's make some money with charles payne. he's looking at right age. right aid. charles: you make a great point. they had an accounting scandal that completely wrecked the company. one of the things about this

call is a lot of people say the stock market should go down because it is up. we were up 61%. i say take profits because it was up. i made a mistake. we got back in the stock. it is the male club but also a cautionary tale to artificially pick the top. all the numbers, there's only one red flag, it did sell by insiders. that bothers me a lot but the street looking at $0.34, three months ago $0.26. in the past five years sales were down 76% each year but for the next five years should be up 50% every single year, starting at a real cheap ratio. could be an acquisition target. cvs and walgreen's have a gigantic battle across the country. once it closes above $6.40 this could be at $10 stock so it was $40 in 1998.

they have come a long way from that. dagen: seems like yesterday. dagen: in the basement? connell: downstairs. dagen: in the basement of this building, two buildings over. connell: you could walk down. dagen: walked that way. charles: stuff like that. the man giving a map but basically underground underneath all of that. charles: you might. dagen: go that way. charles: rockefeller center. check out right aid which is up big but more move to the upside. a cautionary tale for anyone who are officially pick the top of the market. connell: i love when you do that. more lessons learned deegan from his own experience. dagen: things are looking up for small businesses and we have paul mitchell, founder and ceo and billionaire and under on what needs to happen to keep

hope alive. connell: always happy. dagen mcdowell gets upset. dagen: no thank you. the happiest man on the planet, the woman who can ruin it. connell: the call on the nfl. interesting story as well. and of venture, the big idea for the nfl. some lasers on the field so you can see them on the field. charles: let me find the stock. look at rite-aid. hi honey, did you get e toaster cozy?

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connell: here's what is coming up for you on "markets now." what all that means to the economy in just a minute as a . and so on the young on the health care law. how to convince young people to sign-up. who will talk about that and changing the game. and a big miscue could open the door for one big entrepreneur with a big idea for the league. we will get into that in just a few minutes. there you go. shares of tesla seeing heavy volume up to 12%. nicole is back with us for that. nicole: the down near record lows, 10,905. see if it holds up. and watching the automakers very closely, tesla in particular because morgan stanley makes a top pick, risk-reward is their favorite saying tesla has been

beaten down. over the last three months it is down over 20%. of course we have heard of the model as fires and they are still thinking that was not substantial to sell off the stock in that manner so the habit as a top pick. $153 price target, at 138.96. you may remember to approach the $200 market earlier this year but it is of about 12% on the news. auto sales for november here at home and in japan the automakers all doing great. back to you. dagen: and more of that. good news from small businesses, hiring up for the first time in months with 10,000 jobs added last month. borrowing rising to a six-month high. in november. in october. this according to the payroll index.

what to make of this in the road ahead? joining us from austin, texas, cofounder and chief executive officer of paul mitchell. also, patron, we cannot forget patron, that is our personal favorite around here. jp, great to see you. >> love you out there. dagen: what do you make of this? is there more of this to come down the road? >> yes, i do. americans, in fact, i know are beginning to believe in america. small business is growing, leading some more money out. people have become very prudent the last five years. they believed america really works regardless of what is in the news, regardless of the topics of the news that are not that positive america long-term will work and we will straighten our problems out. there are a couple things we can do to make this a little bit faster. dagen: give them to me. >> you bet you. straighten out this stupid

obamacare with all due respect. a friend of mine here in austin, texas, small businessman, had increase his insuranc assurancer $200 per month. i said what was the difference, what did you get for $200 more per month. he said he only difference is i had a $5000 deductible, they made me go to 2500. but you are paying every year $2500 your deductible anyway and over $200 per month. that is not a deal, that is charging you. he said i know, i'm finding ways to cut corners. they can make things okay with businesspeople with insurance and not increase insurance rates so much it makes zero sense, no sense at all, you are paying your deductible every year. it is going to give people more confidence. the other thing would be to believe nd tell people what you believe. ppople listen to news, talk about negative concepts about the negative in something as

opposed to what the meaning behind it really was. if small business people tell others i am hiring people now, getting loans, things are getting better, peoples psyche will say things are getting better and they will start to believe more in america and be more positive of what is going on which creates more productivity for our consumers and more purchasing. dagen: other than optimism, what is the one thing if you own a business, jp, when you go to hire people looking at the business and say i am looking to hire new jobs. what is most important thing you need to senior business in order for the owner to do that, hire additional people? >> the first thing they should do is what we do, we have done it for years, look at your own organization. is everybody working at full capacity? they could do two things quite easily. once they see that is all handled and working to capacity,

the next thing is to bring somebody on by bringing this other person or two or three on, how will that benefit my overall sales, how can i use this new position and everyone around it collectively to increase our sales because of our new person. i let everybody know i am hiring more people because the business is that good. dagen: it was great to see you, please come back before the holiday. >> america works. dagen: thank you, jp, john paul dejoria. take care. connell: backkto jeff flock in detroit. waiting for official ruling from the judge there on whether the city would be eligible to move forward in bankruptcy court. that ruling is now in and jeff joins us. >> it is now official, connell, indeed the judge has ruled detroit is officially eligible

for bankruptcy. that seemed a foregone conclusion based on his earlier ruling, but that is your headline at the moment so this bankruptcy now officially becomes largest bankruptcy in u.s. history, $18 billion. but your headline remains the fact the judge has ruled not only the bankruptcy is legitimate, but in fact the city may reduce, may now, emphasis on may, may reduce pensions on workers. first time a federal judge has ever issued ruling in contravention of michigan constitution which says you cannot reduce pensions, but that is the way it has come down, federal law trumping state constitution. i am looking over my shoulder because we have attorneys coming down. we will get back to you when we get the attorneys out. a lawyer representing some of these pensioners who say they are sure to repeal.

we will see when we report on it. connell: we will try to go back live to you when we get that because this portion of the pensioners is interesting about all of this with the moving forward in bankruptcy court, expected portion of the ruling but that is now official. back to detroit, a white house needs the young to make the health care law work but a new poll shows a staggering number of younger adults have basically no idea about it. dagen: none. bad call on the field sunday could change the way the whole game looks in the nfl. we will show you the technology that could you see and how it is played. connell: the future of the "fast and furious" franchise is in jeopardy now with the death of their star. a tough choice the producers are facing to move forward. coming up on "markets now."

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>> i am lori rothman. we learned november sales from the big three detroit automakers beat expectation. general motors sales up 14%, ford sales bumped up 7%, best november since 2004 2004. chrysler sales jumped 16% all year-over-year. pickups with a best-selling vehicles for all three sectors.

real estate data provider core logic says prices rose in september. but prices are up 12.5% year-over-year. sales on cyber monday set a new single day record of 2.3 billion according to them, up 60% from last year more agent 18% came from mobile devices. 18% jump from last year. that is the latest from the fox business network giving you the power to prosper.

dagen: president obama stated to take the podium this afternoon for a public relation offensive for the affordable care act. connell: as republicans continue to call for a complete overhaul of obamacare. for the latest on this, joining us now in d.c.

rich: president obama tried as if he refuted clearing the health care law more than just a website. still the website and problems sending payment information to insurance companies continue to hamper the administration efforts to get americans enrolled in health insurance. with that white house focused on the benefits, eliminating pre-existing conditions on insurance policies and actually an dollars in benefits to limit the cost of insurance. highlighting it daily for the next couple of weeks. republicans continue their assault on the law. >> it is not just a broken website, this deal is fundamentally flawed. causing people to lose the doctor of their choice, causing them to lose their health plan and if that isn't enough, they are having to pay much higher prices at the same time. >> while absent last six weeks of signing blame and rooting for failure, the house democrats

working with the administration have rolled up our sleeves and gone to work and we are fixing the problems with the affordable care act. >> we will hear from president obama this afternoon on obamacare. back to you. connell: gallup has come out with a paul saying 37% of young americans, the linchpin of this law, are unfamiliar with the affordable care act. dagen: another problem. they had to get familiar with it to financially work. ron christie joins us now with more. in terms of getting the word out, getting the information with the website and people who have lost their insurance, doesn't the white house had to be careful of what information they put out before all the problems are fixed? >> absolutely. credibility has been shot. you can keep your insurance and

the white house is in a tough spot. if they don't mention the promises they had not been able to keep this far finding a way, i believe the health care agenda in jeopardy, but the second term agenda is in trouble. connell: you must think if you are starting the pr, it is positive about this and each day a new thing, he must think the worst has passed, we bottomed out and now it will be up, but if you are wrong, big trouble, right? >> the worst is still to come. connell: why? >> when folks find out they can't keep their doctor. you find people are going into a very expensive plan where they don't have many options to keep the coverage they were looking for, millions of people will say wait a second. i actually think this is in serious jeopardy before we get

to the midterm elections of being significantly modified if not being repealed. dagen: will be modified in terms of losing your doctor? for example out in california, running his own exchanges, a similar situation if you look at some of the cheaper plans in the exchange california is running where it is not the amount of doctors or different doctors in these plans. people will be in for a shock like you said. >> frankly are the young folks necessary to keep them afloat, will they enroll? a story out the said nearly one out of three people that have signed up on the exchanges information wasn't getting to the insurers, cancellations or duplicates, so are the young folks go to sign up in time and will the insurers have the information they need? connell: thank you very much. dagen: more from detroit. the judge in the detroit

bankruptcy ruling the city is eligible for bankruptcy. jeff flock has more from the courtroom. what is going on? jeff: as you might guess, it is being repealed the attorneys. you are live on the fox business network, sir. tell me your reaction to the ruling today. >> clearly this ruling is a threat to the city of detroit, says their pensions are subject to being in bankruptcy, it means they better start mobilizing, they cannot rely on a court to defend the fruits of their labors, and also we want to urge people in two weeks they will be a trial in front of the judge and a critical issue whether or not the $250 million termination fee that interest rate swaps, the most corrupt deals will be paid taking 20% of our tax

dollars for the next eight years, it will be a test to see how much compassion judge roads has for the people of the city whether he is ready to roll for the people. jeff: he put those people ahead of the pensioners. >> what he has done, that is not true, but in two weeks that is what they have done, they cut a deal to pay off $250 million to ubs and bank of america interest-rate swaps corrupting deals, they want to take that out of bankruptcy so it cannot be crammed down. jeff: what are your chances on appeals here? >> the real question is not the chances are in appeal, he left open the final determination what will happen to the pension and the real question is the pensioners needed to be out here in thousands of numbers to say to judge they will not put up with taking away the fruits of their labor.

we need to go out and mobilize to defend those rights and take the money from the bank's to not pay ubs and bank of america, banks that caused the crisis in our city 1 penny. we need to be mobilized. jeff: we appreciate your time. walk with me this way. i want to get over to the attorney if i can as well as you can hear the passion is a very high, and sharon levine is here with us now live on the fox business network. this is about the worst they could have gone, is it not? >> we were disappointed with the decision, we will see what emergency repeals we can seek and we will continue to pursue negotiations through the mediation process and we did hear the judge asked for help particularly from the governor and we're hoping he is listening. >jeff: he does not approve a pln to do so, will you encouraged by that?

>> for your help in the city takes some of that to heart, but we are not going to rely on that, we will continue to pursue all of our options. jeff: how will you pursue that specifically? >> are asking them to listen to us for a better way resolve these issues. we hope to have adjusted negotiations. we have already filed a notice of appeals today and to the extent their issue of the notice of appeal to pursue whatever appellate options we have. jeff: is it put in the pensioners on the same playing field with all the other creditors and all the other banks and others who have invested? >> the judge's ruling today has said retirees, those who get pension benefits are not any better protected than any other creditor, frankly for the citizens of detroit, that is a scary place. jeff: this is a first time a federal judge has ruled pensions can be reduced. how big of a precedent does this

send potentially for other cities around the country that may be considering a similar move? >> i think this is a scary day because state constitution specifically and expressly pension benefits taken away in bankruptcy. and that is very scary. jeff: thank you very much. i tell you, it is a big day in detroit, maybe you see it. a sense of what is happening out in the street. mobilizing protest, a ruling to be appealed, a big day here in detroit. this went beyond what anybody thought it would, but i tell you, i caution you with this, judge rhodes is an extremely experienced and respected bankruptcy attorney, and this was a very long and considered

opinion as ms. levine just said, this could have far-reaching impact beyond today. connell: thank you very much. the idea of going forward in bankruptcy court as you see in the bottom of your screen was not a surprise but the other portion of the ruling getting reaction to the pensioners are equal basically in the eye of the judge to everybody else. that is in just reporting a surprise. more on it coming up. dagen: more on this story, the future of the "fast and furious" movie franchises in question following the sudden death and that horrific car accident of the star of the film, actor paul walker. connell: a business decision what to do going forward. dennis kneale joins us in the studio. dennis: a balancing act for the pictures. you turn the film, halfway through filming when paul walker dies in a fiery car crash on

saturday north of hollywood eerily similar to the stunt you see in the movie itself. do you make it a gift to him, do you rewrite the script and reflect the death of a character because of the high-spee high sr race that goes on? or do you write around him? we have cgi, in 1991 when a key actor, oliver reed i believe it was, dies in the filming of "gladiator" they used cgi to put the actors face into the film and use him for the other scenes. do you do that here? the technology would be vastly better than ever before. you could probably pull it off but no word on what they will do. dagen: the studio has to grapple with how his cast members deal with it because it is so raw and so fresh and in middle of filming it and it has a scheduled release date. dennis: they were supposed to be shooting on monday when this horrible accident happened. you have had other films get

interrupted in the middle of shooting, that film never came out. dagen: heath ledger was another film, same situation. dennis: they used for different actors to play the parts he had left to shoot. connell: how far along are they? dennis: halfway. you cannot afford a franchise like this with $100 million plus production budget, do you just write it off? it isn't as if you just lost the key star. dagen: the way in which he died in the whole nature of the film franchise, overlap. dennis: life imitating art. was he dragracing. the other guy was driving this porsche. they were in a place known for racing.

dagen: thank you, dennis. connell: "markets now," are we going to go back to detroit? breaking news again, you will pick up on this on the other side, but the mayor of detroit is speaking. we will see what he has to say. >> as tough as it is going to be, it is important for the future of the city that we get this behind us. there is a lot of debt on the balance sheet the incumbent mayor or the incoming mayor will have a better valance sheet than any mayor has had in the last 15 to 20 years. the debt has been very, very difficult to deal with because it keeps us from having money to put into the programs that are so desperate for the citizens here in detroit. i do think we will see lights come on. i do think we will see an improved bus service. i do think we will see improved police and fire, improved

response times, these were part of our initiative that i think will become a reality as we move through 2014. i will be open for questions and kevin will be in shortly to speak. >> you mentioned a couple of good issues. the lights coming on in the city. this bankruptcy a good thing for the residents of detroit? >> i don't know it is bad for the pensioners just yet. there is more negotiations that need to take place. i think all our focus has to be on what's best for the citizens of detroit. the 700,000 plus people who are. i don't think we want to get into a situation where we are

putting the citizens against the pensioners. we've got to figure out there will be pain that goes around and we've got to figure out how we can mediate the least amount of pain for any one individual. >> mayor, the judge said this should have happened a long time ago, what is your reaction? >> i absolutely agree. we wasted a lot of time. in my four and half years, we have managed our way through a tough, tough situation, but there was no way we were going to solve the long-term liabilities and the debt on our balance sheet. it was $330 million accumulated deficit over time. we had $18 billion overhang. so we were never able to go out and increase revenue, so the only way we stayed alive, quite

frankly, was through cuts. we cut everything we could, but unless there is more investment coming into the city and a new stream of revenue, there was no way to fix the problem, so now bankruptcy is imminent. the debt on our balance sheet would be less than it is today, that would be a positive on a going forward basis. >> do you figure any particular issue? >> i don't look at blame as anything that will be helpful at this point in time. i want to concentrate on the glass being half full as opposed to being half-empty and say all of us, those of us who live in the city, work in the city, care about the city need to come to the table to see what positive impetus we can bring with us.

>> is there a way to bring up the property tax? >> property taxes are being collected as we speak. i think it is a misnomer because some of the numbers i see are numbers that go back to 2009 when i first came into office where there were 100 100-$150 million in uncollected taxes. you go back 10 years ago, you are using the same numbers, it is not realistic. a lot of it is uncollectible. we need to get the real number as it relates to taxes. it holds true for empty houses, dangerous houses in the city. 78,000. that's not the right number. it's a moving number on the basis, but it's not the -- [inaudible] >> so when you say clean, are we going to just wipe everything away and then just come up with

real numbers? >> well, we've got to get real numbers because the if you can't, if you don't have facts, it's very hard to make intelligent, informed decisions. so we're going to have factual data. i've got a lot of that at hand. i'm passing that on to mike, so he's going to have a major advantage. we had to go back and generate all that data, and that's going to be good for him to make decisions with. >> final question. >> once again, thank you very much. i know, obviously, this is a big story here locally, but it has, it has national fuse people all over the country right now talking about detroit, and we've got to start changing the conversation. and we can't think that bankruptcy is the worst thing that ever happened to us. it can help us now because it will allow us once again to deal

with the things that should have been dealt with over the last 20 or 30 years. the city cannot go forward with the kind of debt and liabilities that we had on our balance sheet. so this opportunity today gives us a chance, i think, to move forward with a clean slate and make good decisions that will improve the quality of life -- cheryl: we have been listening to a press conference by detroit's mayor talking about a monumental, historic decision happening today in detroit within the last hour. a u.s. judge, judge david rhodes, actually ruling that detroit can declare bankruptcy, and the big headline here, dennis, the biggest one is that pensioners for that city are like every other creditor in the city of detroit. this could actually affect other cities facing the same situation -- dennis: unions and others that argued that the state constitution stopped the city from being able to cut pensions, and now a court has said, no, that's not so. let's get to jeff flock who is live on the scene there.

jeff, do you have more? >> reporter: i tell you, we've been talking to a lot of people that represent the unions as well as members of the unions. i have got gayle turner here, the vice president of the retired police officers. >> retired detroit members association. >> reporter: in the had to surprise you. >> no, it didn't. i sat through the trial for those ten days and just looking and listening to all the testimony, i was not surprised by what judge rhodes, his legal opinion was today. >> reporter: what is the potential impact on your members? >> it's going to vary, because in our association we have anywhere from police officers all the way to the chief of police. so it's going to depend on what tear finances are like and what kind of adjustments they might have to make in their lives. >> reporter: at this point, though, we still don't toe. the judge has said you can reduce the pensions, but he hasn't said by how much. in fact, he was very clear in saying i'm not necessarily approving anything. >> exactly. absolutely. and he's right because the city still has to come forth, share the information because as you remember, he talked about the

room, the data room, and the city still needs to give up all that documentation and evidence so we can see exactly what type of savings the city's looking for. >> reporter: is it your contention the city has more assets than -- we've heard from some people here that the city has more assets than is coming to light? >> i believe so. one of the things i did not hear judge rhodes say that they do a bad job of collections. the city does not do a good job of collecting their money. case in point, as far as property taxes. folks who own buildings downtown. some of the business folks that own buildings downtown, they don't do the proper job collecting. >> reporter: thanks very much. we were talking about this. did this surprise you? you went through the trial. did it surprise you? >> it did not surprise me. i think the judge would have been very hard pressed to throw the city out of bankruptcy and the protections that are provided by the bankruptcy code. >> reporter: but you're an attorney that represents retirees. >> yes. >> reporter: you have a fundamental problem with

retirees not being put at the front of the line when this is money that they paid into theoretically. >> well, we have a fundamental problem many treating retirees -- in treating retireings as a general unsecured creditor no different than other bondholder or other creditor who has made credit decisions when determining whether or not they should deal with the city of detroit. pensions are not the same as a3 bond. they just simply aren't. >> reporter: and at the same time, as we discussed earlier some of these bondholders are actually pension funds. like calpers, for example. >> well, certainly, some of the pension funds may have investments in the bonds that are investments in the city of detroit. no doubt about it. >> appreciate the time. thanks. thanks. a lot of fallout on the streets of detroit out in front of the u.s. federal courthouse here in detroit where a, i think it's fair to say, historic ruling has taken place today. the fallout from that we are

just now beginning to get. we will watch this all day and going forward. dennis: thank you very much, jeff flock. welcome, everyone, i'm dennis kneale here with cheryl cheryl . let's take this topic to our panel, scott martin of united advisers, and we've also got charles payne and liz mac donald. charles, let's start with you. federal court has said the state constitution doesn't stop the city of detroit from cutting pensions as it tries to work us way out of bankruptcy which it will now file. does this make it better for the the city or worse? >> well, it makes it better for the city of detroit. obviously, it's extraordinarily painful, but it gives them a chance to have a real economic rebirth. and i've got the tell you, you know, mayor bing brought up the fact that the world's watching this because this may open the door now for this to happen across the country because there are a lot of cities and municipalities in the same circumstance. so, listen, if pensions -- they were made some promises, but they were extraordinarily lavish. they couldn't be lived up to, and this might be the only way

for detroit -- cheryl: but, charles, with the tax situation also in detroit, i mean, you've got -- the population has been decimated, and the mayor was just saying in his press conference that businesses are gone. all of the big taxpayers, if you will, in that city were gone. even with these massive cuts, even with the bankruptcy, do you think they can survive? >> i think they will. and to your point, you know what? businesses haven't been paying taxes, most residents aren't paying their property taxes. but businesses are beginning to come back in. there's a trickle of businesses and some bigtime -- dennis: okay, but, guys, to get back more specifically to the topic at hand, scott martin in chicago, detroit faces $18 billion unfunded liabilities, and people had to wait hours for the police to show up. were the unions wrong to fight for pensioners? >> no, i don't think they were wrong, dennis. that's what they had to do. the joke around in chicago is chicago is basically could be detroit, you know, in a couple years. i mean, that's one thing that's

going on ear is we're having the same -- here, this is just a precursor to a possible wave of bankruptcies that might happen across the country. i'll tell you one thing else to watch out for, watch out for your muni bond portfolios, the bonds that allow these cities and states issue, the funny part -- and jeff flock brought it up in his interview, a lot of those pension funds be buy those very bonds. so you're going to talk about downgrades, issues with -- dennis: wait a minute. >> they need to issue debt to actually fund the operation. dennis: hasn't a judge just said before you guys thought you couldn't cut pensions, hasn't a judge just said now you've got more stuff you can cut? why wouldn't that be better for bonds? >> well, you'll see, dennis, you've seen downgrades already kind of rumble through the market, and let's face it, whether downgrades are correct or not -- and, again, it's a good reset button. i think this will firm up some of those debt positions, be i the short-term effect of the is not going to be good.

>> yeah, i don't think it's going to be -- dennis: we're going to go to kevin orr, and see what he has to say right now. >> meticulous ruling in in this regard. we're also pleased that we're able to make some headway, even end this process, on revitalizing city services, putting in a new solid waste contract, getting the lights initiative restored, helping the new police chief drive down crime and otherwise reinvent and revitalize the city is that it can address the many concerns that have been coming this way for so long. but as i said before, we have a lot of work ahead of us, and what i would ask both our creditors -- none of whom, by the way, filed an objection to our eligibility -- but equally important, our labor partners to come forward with us and to take this opportunity even end the process of litigation and appeals to try to get at the sorely needed reform that this city has got to achieve so we

can move forward into a new day. and we can prepare, hopefully, a consensual plan of adjustment and be with able to remove the receivership over the city so that it can grow and thrive. with that, i'd be happy to take any questions. yes, sir. >> explain to us what they mean by clean slate? is. >> sure. >> you break that down a little bit? >> typically, in bankruptcy organizations clean slate or fresh start is an opportunity to relieve ourselves as a city of the crushing debt burden that we have. as the judge mentioned during his ruling, approximately 40% of every dollar that the city takes in in the general fund goes to paying legacy debts; pension obligations, some of which are unfunded, or debt. that's just not sustainable was in the next three to four years, that number's going to go to almost 65%, almost two-thirds.

we have to relieve the city of that burden, and that would be the careen slate. in other words, the city would get to a option that it could go forward and pay its bills as they become due in the ordinary course. yes, sir. >> anything the judge say today change course for you? >> >> no. the judge's ruling was straight down the middle. i think i said before, um, in various press opportunities the issue of federal preemption and supremacy are things that i personally have been involved with throughout my career and consequently, there were no surprises in that ruling. it's pretty straightforward. i know it is troubling to some people given the state law, but this has happened in, many areas, many, many times. and as judge rhodes said, virtually in the 30 years that i've been doing this type of work, there has not been a restructuring where some contracts are not adjusted. it's just that the contracts here have a human dimension because they're pensions. that's very concerning. yes, ma'am. >> how do we go --

[inaudible] because this is about detroit, not just lawmakers and the money. what happens for the citizens of detroit? >> well, hopefully, the citizens will begin and already have begun to see a better level of services return to the city so that the city becomes a more attractive place to live. in some capacities that that's happened. right here in downtown, for instance, the city thrives. we're 97% leased, there are many projects. if you go down woodward corridor, you'll see a number of apartment buildings, lofts going up, missioned-use construction. so we want to make sure that type of reform is pushed out to the neighborhoods. but equally important be, i'd like to say the this to the many city pros, we're going to continue -- lows, we're going to continue to pay salaries as they become due, pay all benefits and checks as they come due and continue to pay our bills as they become due if the ordinary course. in fact, for the first time in years the city is actually

paying its trade creditors and others on a 3046 day net basis. we're paying things on time. so it's business as usual in detroit, but this determination gives us a better opportunity to go forward with that clean slate. dennis: all right. we have been listening to detroit's emergency financial manager kevin orr in the wake of that ruling that says the the city can file bankruptcy and cut pensions. liz macdonald, what's your reaction? >> well, you know, all of this is supportive of muni bond market in the long term, what detroit is doing, because the muni bond investor and the people on wall street would say, hey, what detroit is now doing is trying to right-size the ship, so we could continue to lend into detroit. i will say this, mayor bing hit it right on the head. he said these problems have been decades in the making, certainly since the 1950s. and what other cities across the country are doing, dennis and cheryl, they are merging. you see this in california, you see it on the outskirts of detroit, you see suburbs and towns merging police and fire and garbage disposal services. so that's going to be the wave

of the future for these cities that are on the brink. dennis: scott, good for muni bonds in the long term, liz just said. do you disagree? >> maybe. listen, guys, what's happened since this whole detroit thing starts inside initial bankruptcy filing is bond prices have gone down. that's the thing, they've moved down because folks haven't wanted to touch them. and, yes, i agree with e. mac, there could be a long-term strategy or opportunity here because certainly you want to buy bond prices when they're down, not when they're up and looking good, but i just don't know if that's ready to move forward yet because we haven't seen this playous nationally, and i think that's the key. dennis: charles payne, we just heard kevin orr strikingly say, look, creditors never sued to stop this bankruptcy while unions did. what do you say? is. >> well, he also said there was a human dimension to this, pointing out the pensions. and they probably have more skin in the game certainly as individuals and collective. but kevin orr also talked about the logical conclusion of this

whole thing. i think the narrative here is the logical conclusion of where america is, what do we have, $16, $17 trillion in debt and counting? we keep fighting to raise the debt crealing again. if there's a logical conclusion for detroit, the same thing goes to america in general. it doesn't have to happen overnight, but we'd better get our overall house in order. dennis: nicely dope. of thanks, guys. cheryl: we're going to wring you new details. markets now will be right back. ♪ ♪ ♪

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♪ ♪ cheryl: you've got the dow down 107 points, we are watching a bit of a market selloff since that tapering fear's going on with market participants right now. of course, we're going to continue to watch the dow, the s&p, nasdaq lower as well right now. wells fargo chief investment officer is forecasting that the s&p will gain another 100 points in the next 13 months as the

global economy improves, but he says the road will not be smooth, and the biggest threat to investors may actually be from within. and daryl is right here next to me. you said the big threat right now is basically the fear of those that were afraid of the market has turned into regret because now they're worried that they are waiting too late to jump in the market. so what is your prediction as to what's aping right now? >> yeah, actually, from the 2009 bottom a number of investors held a lot of fear that to get back into the equity markets, they felt like they were burped. and now we've seen the -- burned. huge year in this year, huge year last year, so that fear has quickly turned into regret that they're missing out on this big market rally. so trying to figure out how do they gain exposure if they've been underexposed to equity, all the data shows us the retail and individual invest efforts still are underexposed to the equity market. cheryl: the equity markets for october, it's not a small

number, but the month prior to that was over 50, so you could actually make the case that while they did slow down even though you still continue to see the selloff in the market, my question is all that cash on the sidelines, does it come back? >> i think it will at some point which could cause us to get over our skis a little bit from a valuation standpoint. but when you have a bubble, what people get concerned about is significant asset price inflation, which we have, access to easy money, which we have with the fed pumping money in the system, but you also need overvaluations, and you need some form of leverage to bring all that to a boil before you ever create a bubble. and those last two conditions, overvaluation and leverage in the system, neither of those exist today which would be quintessential bubbles. cheryl: obviously. but a 1900 call for the s&p 500 next year is still a -- so bubble or not, you're still looking for a positive year. >> yeah. 6% plus a 2% dividend, you're talking 8-9% next year, so a

good year. cheryl: sorry i've got to cut it short, but, daryl, thank you very much. good to have you on the show. >> thank you, cheryl. dennis: foreign investors flocking to american real estate, and coming up, bob massi on what it means for home prices. cheryl: and call it the wild west for airlines. the battle for west coast dominance, and travelers reaping some big savings. details coming up in the west coast minute. as we go to break, we'll take a look at how the world's currencies are faring against the u.s. dollar. ♪ ♪ [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded?

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dennis: what's bugging me is the ftc, another imperial bureaucracy run amok. "the wall street journal" tells how the federal trade excision has been harassing a trade group for piano teachers. it's a small nonprofit in cincinnati. been around since 1876. a dozen employees, 22,000 members. now, the group has a guideline saying let's not steal each other's students. the ftc says that smacks of anti-competitive behavior.

horrors, so the piano teachers instantly rescinded the guideline, but that wasn't a deep enough bow to the ftc. the agency bullied the piano teachers as if it were in the cast of "glee." the group must recite an anti-price fixing statement at every future national event and develop a compliance program and report in to the ftc regularly on bended knee. finish and the piano teachers must do this for the next 20 years. and for what? for nothing! the ftc won't even reveal how this case came to its attention. maybe it just doesn't like "glee." so tweet me, @dennis kneale, targeting piano teachers, is the, ftc out of control? cheryl, do you play piano? cheryl: for about two seconds when i was with 8 years old. dennis: trombone. cheryl: there you go. i was a singer, actually. demand for u.s. homes rising but not by americans.

fox news analyst bob massi is going to tell us what this year's boom in foreign buyers means for the future of the housing market. dennis: and paul walker's sudden death leaving one of hollywood's biggest action film franchises with some major decisions. the latest coming up in our media minute. first, take a look at some of today's s&p winners and losers. ♪ ♪ every day we're working to be an even better company -

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>> a story everyone is talking

about, using drones for deliveries. we are going to look into the likelihood of the government go ahead. investors coming far and wide to own a piece of american real-estate, bob massey joins us with how this will affect home prices and dreamworks into the action with production of the first original kids stories on netflix in the media minute. stocks every 15 minutes. let's get to the stock exchange with nicole petallides, ref day. nicole: a rough day on wall street, we are watching the dow with down arrows and the jobs report on friday and the dow remains lower. looks like three days of losses for the dow and the s&p. not a rough day for abercrombie and fitch. 35-94, sitting up over 5.5%, this is because shareholders are urging abercrombie and fitch replace its ceo, which it had for 18 years saying he posts a stumbling block for any transaction moving forward, they

are working until shareholders, including one known as engage capital, a young firm, very prominent, owns 400,000 shares of abercrombie, working with them, committed to creating value for this company, working with shareholders and changing, working with shareholders seeking changes, possible sales. what will we see from abercrombie? there is no apparent successor for this role of ceo but in the meantime we have at least one activist shareholder clamoring for a change and the board says they are very supportive but don't forget markets are soaring this year. abercrombie is down 25% to the downside. major averages are up 25% this year. something has got to give. dennis: thanks very much. liz: once vacant units are

filling up with demands passing supply but not americans who are buying. for investors are flocking to american real-estate. joining me with what this means for home prices, real estate attorney and fox news legal analyst bob massey. great to see you. >> thank you for having me. cheryl: i was looking at this report on the miami market because i was curious about las vegas, for investors dumping money into investments, it is happening in manhattan. what about vegas? >> vegas had hedge funds until 60 days ago. a lot of canadians and asians coming in, buying in droves block of homes, 200 homes, condominiums. that slowed down a little bit but they are the ones along with lenders. about 60,000 homes in las vegas owned by lenders in default or being short sold which is a lot

of inventory which is why prices are crazy, to figure out we're going to be. cheryl: isn't it true that sometimes banks will pace up the inventory? if they put the supply out at once prices fall, pays out the inventory to make sure they get more bang for their buck. is that what will happen next year? >> i talked to some different people in the business, you are correct. the longer they hold on and prices go up because of what is happening all new homes are selling, lenders or developers are financing the homes and selling to fannie and freddie, rates go back up and led the inventory release a little bit at a time and they will make more for their money for the fact that supply and demand will be there. cheryl: are we at crisis levels, disconcerting levels as far as home priccs? we are in this in line with near zero interest rate, continuing

to buy mortgage-backed securities, this is a time when the fed is helping the economy. once that goes away the stock market building pressure today, developers may be left holding property they can't unload because no one can get at 4% loan. >> that is a problem they have to consider. talking to my buddies in the lending business one thing they are telling me is regulations next year starting in january, more difficult for homeowners to buy, there will be more regulation, more disclosure has to be made, more assurances by the lender so purposes of getting people to qualify for loans and you still have the fallout from everything we have gone through so there is this avalanche everyone is dealing with. cheryl: do you mean federal regulation? >> qualified mortgages, going to make more regulation, if any and freddie situation where my understanding is the letters

have to guarantee a certain amount of return to fannie and freddie so is passed to the consumer so is more difficult for people even today to be able to get loans because of the regulations and increased regulations next year. cheryl: what about the unemployment situation? nobody knows that better than nevada or arizona or california, unemployment is coming down to medieval levels, jobs created are lower paying jobs. is that another reason you have seen some of the pressure in the home builder stocks? maybe we are seeing not a rosy housing market that we had in 13. >> the unemployment, problems in nevada and particularly las vegas is here is our industry, casino industry, service oriented and construction. we lost the construction and we now see the construction coming back. the unemployment is high. underemployment is the real no. so when you combine, and

unemployment, you combine a fallout from the crisis and combine the difficulty and getting new homes, it is difficult to get a hold on what 14 is going to look like. we want to be optimistic, we hope it will be better for homeowners with these homeowners that got beaten up by lenders are still in situations that they don't have the ability to borrow so the question is who is the next homeowner? that is why hedge funds and investors, what they are doing 20% down, 7% interest, carry the paper five years, it will jump back in, hoping they can get refinance in five years. cheryl: the next homeowner is perfect, that is another segment. bob massey, a fortune teller, thank you. dennis: in today's media minute, "fast and furious" in life-and-death, comtesse universal faces a delicate balancing act after the death of actor paul walker in a fiery car crash. how much should art imitate

life? "fast and furious" vii was happily through filling with water in various scenes when the 40-year-old actor died on saturday in a high-speed car crash north of hollywood, he really similar to some of the stunts in a six film franchise. universal must set aside how to proceed, make the tribute to paul walker, rewrite the script and at his character meet a tragic end, or use computer special effects to insert the actor's image into the rest of the film? this was used for gladiator in 1991. technology is better now. netflix will debut its first original kids show on christmas eve. a deal with dreamworks animation to turn the movie turbo about a speedy snail with big dreams into a tv series but turbo came out in theaters and gross $280 million worldwide, dreamworks like we lost money on the film. cheryl: interesting what happens with the "fast and furious" film. those are very valid questions.

dennis: the link between how he died in the film's plot. cheryl: can't imagine what the directors are going through. amazon's pushed war drones getting a lot of headlines over the last couple days but can the new technology that the government's approval? the experts coming. dennis: the most dangerous the apps ever. an inside look at lulu, the new dating service attracting big investment. so i can reach ally bank 24/7, but there are no branches? 24/7. i'm sorry, i'just really reluctant to try new things. really? what's wrong with trying new things? look! mommy's new vacuum! (cat screech) you feel that in your muscles? i do... drink water. it's a long story. well, not having branches let's us give you great rates and service.

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ashley: i am ashley webster. online sales on cybermonday setting a new single-day record of $2.3 billion according to adobe, sales up 16% from last year, 18%, the buying came from mobile devices, an 80% jump from last year. the three automakers exceeded expectations, gm up 13%, ford up 7%, ford's best november since 2004, chrysler showing sales jumping 16%, pickup trucks the best-selling vehicles for all three automakers. small-business borrowing rose to a six year high, small business lending index measures the

volume of loans for companies, 20 points forward, set to increase over september. that is the latest from the fox business network giving you the power to prosper.

dennis: amazon getting a lot of attention with the announcement it is testing an and the delivery drones. and a senate hearing on drone regulation coming that next year drones are a long way from your doorstep, a serious legal and political hurdles. joining mrs. aviation lawyer and instant rated pilot you were watching 60 minutes sunday night and jeff days those unveils this drone idea and packing to doorsteps, what did you think? >> i bought the technology was impressive. it is irresistible. we have seen a glimpse of the future. this technology is on its way. dennis: will amazon be able to do this anytime soon? >> the faa and the comprehensive plan for unmanned air systems

has established somewhat ambitiously 2015 at the time for their enrolling, regulations to allow these vehicles to be integrated and that is the word they use, not segregated but integrated international aerospace. those regulations will have to cover a lot of detail. dennis: if they don't start until 2015 you have specific programs like amazon to go through approval process. >> at the moment the f a a one only allow private owner operator of unmanned vehicles to fly on an experimental basis to research and development purposes, cannot be used for commercial purposes, have to await the evolution of these regulations. dennis: what year is amazon serious about this drone thing what you did this start? >> more like 2017, 2018 because we are looking at some issues involving particularly three areas of concern, privacy, security and safety. the safety area is the area of chief concern for the aviation community and the safety issue is daunting and challenging

particularly with respect to mid-air collisions. dennis: is just a helicopter. he doesn't get faa clearance. >> he stays below 400 feet, the present regulation. if you are going to use these in a serious way you have to integrate them with other aircraft recommended low-flying general aviation. dennis: thousands of dragonflies. one from carrying hundreds of boxes might be a more efficient delivery system and hundreds of drones but even if they get the f a a to go their way amazon would need fcc, interstate commerce, national security agency, this is never happening. >> security implications of this challenging. with respect to security, there are requirements for checking out the background of persons who operate these vehicles, delivery systems in addition to delivering the 9 packages to your front door they could deliver small weapons benign pa

your front door they could deliver small weapons systems. this will be challenge dennis: getting a lot of pr out of this. thanks for being with us. cheryl: after a terrible date have you ever wanted to warn other women or men about going out with zak person? now there is an apps for doing that. we should explain what this is, just for women. >> an application that is wildly popular that allows women to rate men and not only raid them but on a 1-10 scale. the issue is there are privacy concerns, reputation concerns. i talked to the lulu ceo about a lot of these, what the numbers are behind it. >> we are just focusing, we are very young so we are focused on building the best possible experience moving into new

verticals, new markets and trying to reach women everywhere. >> as for the controversial privacy concerns, the apps was created in accordance with u.s. law and regulation but obviously there are other big questions. cheryl: first and foremost you can go on and say whatever you want about a person, you can do that on facebook or twitter but i wonder if lulu is realizing this could set off, say you have a bad date and you are heartbroken and you can go on and the story is reputation. >> there is potential for that. a lot of limitations based on certain hash tag that are prepared that you have to choose some so there may be less but the ceo said this is a safe place for women what she wants to create, a place for women to rate the men just as they raised their partner or their restaurant. cheryl: what is the investment opportunity? they are raising millions of dollars.

it is the younger crowd. >> the company says they are getting huge input from advertisers, potential brands. a lot of women have disposable income and they are trying to make a dent and some companies have started profiles, burger king burger, women can read the burger as if it were rock man. seeing stuff happening on lulu right now. what i found most interesting was the ceos said they don't want to just great men but expand out and do products, beauty, career, all kinds of things. cheryl: at what point the men could get to rate the women? >> what that might mean. cheryl: good stories. dennis: men have been reading you for years. demand for flour taking a hit as more people turn to gluten free product. let's head to the cme, phil

flynn, flour consumption and a 22 year. phil: absolutely. what is weird about it is the reason we have gluten free food in the first place is of celiac disease. only 1% of the country has this disease. 20 years ago you couldn't find any product for these people with this disease now everybody wants this disease because everyone is going gluten free. it is really impacting the market but i tell you right now it is a hot market. corporate america is embracing this gluten free trend or fad if you will and creating more products, projecting this will be at $4.2 billion business today, could be a $6 billion business in the future. when the fad goes away like a low carb you might have a lot of products nobody wants. dennis: thank you. phil flynn. cheryl: time for your west coast minute, california lawmakers getting a 5.3% pay raise as the

fiscal problems in the golden state improved. predicted $2.4 billion reserve is double previous estimates and more money will go to state schools. lawmaker's pay will increase 90,000 and change to $90,000 a year and governor brown getting a payment. delta and alaska airlines uping the competition and down the west coast, the two airlines not only adding flights to several coast cities, on some routes, they are being cut to. air fares, $49 between sea-tac and san francisco, lax to seattle running at $89 went away. other airlines, delta and alaska both down. stock trading today. san francisco international airport joining other airports around the country to offer her a dogs to stressed out passengers. the program is called the wag dubbed a should begins today. other airports around the country do this as well. that is your west coast amended.

dennis: the ftc targeting piano teachers. has it gone completely out of control? your response to what is bugging me ahead. tñ

dennis: the ftc targeting piano teachers. here's what you had to say, says entire dog eat dog rules sound nice on paper but equal opportunity does not mean all are equal in ability. the best should get more. matt miller says targeting is right and massively powerful trade group controls billions of piano keys which one picked off the old man? when you have 40 clients and

make $12,000 a year there's something wrong. mike kelly says i felt threatened by piano teachers for some time. now i can play my juice heart in peace. cheryl: hello. many travelers were worried weather this weekend is the basketball team they are -- passengers at a gainesville regional airport were forced to change their travel plans after delta canceled flight to atlanta to the university of florida to the basketball team to use clean after theirs was grounded, gainesville reporting passengers given vouchers replace on other flights. the piper they were told was a mechanical difficulty, but they saw florida players boarding a plane. 28-32. i am kinking losses. dennis: any plane -- elsewhere, need to catch your breath, stop struggling with the dow on track

for the first three day losing streak in two month. cheryl: a landmark ruling out of detroit, the debt ridden city can move forward with the largest bankruptcy in u.s. history. adam and lori following that story. stay with us. ya know, with new fedex one rate you can fill that box and pay one flat rate. i didn't know the coal thing was real. it's very real... david rivera. rivera, david. [ male announcer ] fedex one rate. simple, flat rate shipping with the reliability of fedex.

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could help americans save $300 billion each year. take the energy quiz. energy lis here. try align. it's the number one ge recommended probiotic that helps maintain digestive balance. ♪ stay in the groove with align. lori: the largest municipal bankruptcy in u.s. history can move forward. i am lori rothman. adam: stephen rose declared insolvent, detroit insolvent and eligible for chapter 9 bankruptcy. the big surprise, the judge ruled pensions could be part of the cost on the chopping block.

lori: there are still all law, there is a lot more than needs to be worked out with detroit so what you need to know. adam: don't take your eye off the market, stocks tumbling with the dow below 16,000 and the s&p below 1800. new highs reached for the first time just last month. cheryl: lori: halfwit between snap chat and ed snowden, that is the model for secure messaging apps welker. we talked to its co-founder and ceo in a new invention arms rates in the wake of ed snowden. welcome back. they troy to the big story today but first the markets, the dow is down triple digits of 104 and all 3 major averages extending losses. let's go to nicole petallides on a floor of the stock exchange for an update. nicole: we are looking at the markets under pressure, third day in a row of selling as we